Market observations and predictions concentrated on the implications of that deal and its effect on 3Com’s chief rival, Cisco Systems Inc. “This sets the stage for a clash of the titans,” said Warren Suss, president of Suss Consulting, adding that the purchase puts HP on a collision course with Cisco, “a force to be reckoned with in the federal space.”

A smaller deal announced in November also presents intriguing possibilities. In November, U.K. satellite communications provider Inmarsat plc said it is buying Segovia Inc., a global IP communications provider based in Herndon, Va., for $110 million.

Each of the main organizations that make up the triumvirate created by the acquisition is a strong player. London-based Inmarsat owns and operates 11 satellites in geostationary orbit around the Earth, including the three Inmarsat-4 (I-4) satellites that form its Broadband Global Area Network (BGAN) system, launched in 2005. Its customer list also is global, spanning Africa, Asia, Australia, the European Union and the Middle East, in addition to NATO and NATO-aligned countries.

Segovia has carved out a niche by providing secure global IP communications solutions, notably to the Defense Department and Homeland Security Department. Through relationships with satellite companies, it has access to 20 satellites, including the three I-4 ones. And it owns and operates its own global, high-availability IPv6 terrestrial network, which it integrates with commercial satellite communications technology, including Inmarsat’s BGAN system, to provide comprehensive services.

The third element is another U.S. company: Bethesda, Md.-based Stratos Global Inc. Inmarsat’s $636 million purchase of the advanced mobile and fixed-site remote communications solutions provider effectively began in 2007, although the closing was in April. Inmarsat indirectly financed the purchase by Inmarsat’s investment arm of CIP Canada Investment Inc.

The deal included an option to acquire the Canadian investment firm — and thus Stratos, now a wholly owned operating division of the Inmarsat Group. Stratos sells an extensive portfolio of remote communications solutions, including mobile and fixed satellite and microwave services, such as its Stratos Advantage suite of services, to more than 20,000 U.S. and international government, military, first responder, maritime and other enterprise users worldwide.

In the second quarter of 2010 when Inmarsat’s new Global Satellite Phone Services become available, Stratos will be a distribution partner. The new service will run on Inmarsat’s BGAN system and be managed through Stratos Dashboard.

The deal is timely for Segovia, said Mike Wheeler, the company's founder and president. “We’ve had good success,” he said. The company, founded in 2002, has had solid growth, with total revenue for 2008 at $67 million. “But as you go after progressively larger opportunities in programs in our particular market — the U.S. government market — having a larger scale is certainly a benefit.”

Inmarsat will also be able to take advantage of Segovia’s DOD presence. NATO forces will likely be influenced by the U.S. military's communications choices.

DSTS-G, along with Inmarsat contracts from the Defense Information Services Agency and General Services Administration’s SATCOM II, will be replaced by the new $5 billion, 10-year Future ComSatCom Services Acquisition (FCSA) jointly run by DISA and GSA. “We’ll absolutely be involved in the FCSA procurement,” Wheeler said.

That’s pretty much a lock. “The trend within the DOD toward end-to-end solution acquisition versus piecemeal component acquisition is expected to drive demand for Segovia’s managed solutions and services in the coming years,” Inmarsat CEO Andrew Sukawaty said in a statement.

Rather than build a single-source device, Segovia relies on integration of commercial products from companies such as Cisco Systems Inc., ZipLink Inc. and others for a more flexible and cost-effective solution, Wheeler said.

The company recently introduced its portable Integrated Communications Equipment device, which is about the size of a phone book and designed for use by small mobile teams. “You can take it anywhere in the world and quickly be able to operate over our terrestrial network, our [very small aperture terminal] global solutions or our BGAN solutions from Inmarsat,” he said.

When the acquisition closes, Segovia executives will report to Stratos CEO Jim Parm and become part of the Stratos direct delivery organization, but the division will operate independently, Wheeler said. The company’s 120 employees also will continue as usual — “that was a big part of the discussion and dialogue with Inmarsat,” Wheeler said.

He and Chief Operating Officer Mark Moore have been through similar acquisitions before, Wheeler said.

“It’s a little anticlimactic because you close the deal, and the next morning you come in and you go back to work. And that’s exactly what we’ll do here. We’ll be here and focused on how do we grow the business and serve customers and make sure our folks are taken care of."

About the Author

Sami Lais is a special contributor to Washington Technology.

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